The Wall Street crusader who fell from grace

One thing that might be said about Eliot Spitzer, scourge of Wall Street, crusader for the little man, upright moral citizen, Client No 9, is that he went out with a bang in every sense of the word.

His tragicomic fall from grace would have made a compelling story at any time. That it coincided with the most explosive market meltdown in decades made it a drama worthy of The Bonfire of the Vanities. "I am deeply sorry that I did not live up to what was expected of me," said Spitzer at his final press call. Oh yes you did, Eliot, oh yes you did. New York hasn't had such a glee-fest in years.

It took the oyster bar inside Grand Central Station less than a day to get a "Client 9" champagne cocktail on to its menu, noted Tom Leonard in The Daily Telegraph. "On a clothing website, I counted 294 Eliot Spitzer themed T-shirts". The Spitzenfreude was most pronounced on Wall Street, where Spitzer had made countless enemies during his witch-hunting stint as attorney-general. Traders cheered his downfall; "some people even attributed the market's mid-week bounce to glee over Mr Spitzer, rather than to the $200bn shovelled their way by the Fed," said The Economist.

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The celebrations weren't just because a sanctimonious "scold" had been exposed as a hypocrite (Spitzer had gone after prostitution rings, vowing to "prevent the abuse of young women"). It was the fact that he had played so dirty that counted. In public, he was hailed as the new Eliot Ness for rooting out corruption and fraud. Yet, behind the scenes, he was ruthless. Wire-tapping, smearing, moral blackmail it was all the same to Spitzer, who extracted $5bn in penalties from financial firms during his reign as Wall Street's "Lord High Executioner".

During Spitzer's vindictive campaign against NYSE chief, Richard Grasso, aides circulated unfounded allegations that Grasso was sleeping with his secretary. In 2005, Goldman Sachs chairman, John Whitehead, was so unnerved by Spitzer's response to a critical article he'd written for the Wall Street Journal, that he took notes of the conversation. "I will be coming after you," Spitzer allegedly hissed. "You will pay dearly for what you have done."

Spitzer was "a clever prosecutor", says Newsweek, precisely because he grew up in the same socio-economic milieu as Wall Street's barons. "He knew their dirty little secrets and he knew how to shame them." His father, Bernard, had made a fortune in real estate and would deploy devious ruses to thrash his children at Monopoly, because it taught them "never to defer to authority". As a schoolboy, Eliot was renowned for reading foreign-policy magazines to bone-up for the high level of debate required at the Spitzer dinner later. At Harvard, he was known as "Ironbutt" for his prodigious study habits.

Yet the chief impact, says Time, was to impart a dangerous sense of entitlement "that the usual boundaries of authority didn't apply to him". It fuelled a "history of recklessness", punctuated by terrible tantrums when he was thwarted. Spitzer also had many virtues, concludes Fortune. But "a man who couldn't behave like an adult" should never have risen so far. Still, it could have been worse. "It's reliably reported that he eventually wanted to be President."

Eliot Spitzer: who shot the sheriff?

The "Sheriff of Wall Street" had many faults, says Froma Harrop in Newsday, but he deserves credit for going after all those "busily suckering the investing public". He was also a perceptive analyst of future dangers. He blasted the Bush administration for preventing states from passing their own laws against predatory mortgage lending, warning "these practices if left unchecked, threaten our financial markets". He was right.

Ultimately, he was a friend to Wall Street, agrees the FT. Prior to his defenestration, he was spearheading the drive "to save the monoline insurers" and streamline regulation. "Those who are concerned about New York's competitiveness may regret his fall from grace."

The astonishing thing about Spitzer's fall was that he must have known the risks he was taking each time he shelled out $4,300 for a steamy session with "Kristen", says Newsweek. He was nabbed as a result of Suspicious Activity Reports, which note odd patterns of cash withdrawals or wire transfers (he'd asked his bank to transfer the cash in someone else's name). Yet he had helped frame the rules of the Patriot Act, which require banks to pass on such details to the FBI.

Unsurprisingly, wild conspiracy theories are circulating, says the Evening Standard. There are certainly "grounds for suggesting that Spitzer may have been targeted by his enemies", says The Daily Telegraph. But such is their delight in his downfall that "the usually sharp critical faculties of New Yorkers appear to have been suspended". America loves conspiracy theories. "But is anybody interested in this one? Fuggedaboudit."